A mortgage broker that specializes in home loans for veterans has been hit with a $7.5 million penalty because of alleged illegal telephone calls and deceptive advertising.
Mortgage Investors Corp. says that its mission is to help U.S. veterans same money on loans that are guaranteed by the Department of Veterans Affairs.
The St. Petersburg, Fla.-based firm, which was founded in 1938, claims that it refinances more VA loans than any other mortgage company in the country.
During the past 15 years, VA refinance production reportedly totaled $30 billion at the company.
But the Federal Trade Commission claims that Mortgage Investors — which also operates as AmeriGroup Mortgage Corp., Veterans Information Department and Veterans Home Loans — is originating loans using unscrupulous tactics.
The FTC alleges that the company violated the Do Not Call provisions of its Telemarketing Sales Rule. “Hundreds of telemarketers” are on staff making cold calls and utilizing written scripts.
The company is also accused of making 5.4 million calls between February 2009 and July 2012 to consumers listed on the FTC’s National Do Not Call Registry while failing to remove consumers from its own call list despite repeated requests to be removed. In some cases, customers who complained about the calls were transferred to supervisors that continued to attempt a sale.
In addition, Mortgage Investors allegedly violated the Mortgage Acts and Practices – Advertising Rule — or MAP Rule. The FTC says that the firm implies to loan prospects that it can save them money over the life of a refinanced loan even though it actually puts them into adjustable-rate mortgages where the interest rate can increase.
Earlier this month, the FTC — which said it has received thousands of complaints about the company — filed a lawsuit against Mortgage Investors in a Florida federal court.
An announcement Thursday indicated that Mortgage Investors has agreed to a settlement and will pay a $7.5 million civil money penalty, “the largest fine the FTC has ever collected for allegedly violating Do Not Call provisions of the agency’s Telemarketing Sales Rule.”
The agency said that the action was the first one brought under the MAP Rule, while the settlement marks the 10-year anniversary of the Do Not Call registry.
It’s not the only adverse action that has been taken against the company.
In August 2008, Mortgage Investors agreed to a $78,500 settlement with the Department of Housing and Urban Development, while in 2003 it was the first company to be charged with violating the Oklahoma Telemarketer Restriction Act.